Telco giant MTN reports first major loss in eight years
For the first time in eight years, MTN Group Ltd, Africa’s largest wireless carrier by revenue has reported its first loss since in eight years, largely due to the sharp devaluation of the Nigerian naira.
The telecom giant posted a loss of 7.39 billion rand ($414.7 million) for the six months ending in June, which is decline to the 4.14 billion rand profit it recorded during the same period last year. This marks MTN's first loss since it paid a $1 billion fine imposed by the Nigerian government in 2016.
MTN Chief Executive Officer Ralph Mupita, in an interview with Bloomberg TV, attributed the loss to the recent volatility of the naira, which has depreciated by over 70% against the dollar since President Bola Tinubu took office in May 2023 and initiated sweeping economic reforms. Mupita suggested that the inflation cycle in Nigeria is expected to peak between the third and fourth quarters of the year, potentially creating opportunities for co-investment in infrastructure with third parties.
“Naira volatility is nearer term, and the inflation cycle in Nigeria is expected to peak in the third quarter, early fourth quarter,” MTN Chief Executive Officer Ralph Mupita said in a Bloomberg TV interview. “That will create an opportunity of co-investment with third parties to accelerate investment in infrastructure,” said Mupita
Nigeria remains a big market for MTN, with approximately 77 million customers contributing about a third of the company’s overall earnings. Despite the financial setback, MTN's shares rose by 0.8% to 89.32 rand in Johannesburg trading.
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Beyond Nigeria, MTN also faces challenges in other key markets including Iran, where the company owns 49% of MTN IranCell and a stake in the local ride-hailing service Snapp, MTN has 3 billion rand in dividends trapped due to U.S. sanctions, according to Mupita.
